Weekly Fundamentals - Precious Metals to Benefit Most from QE3

By International Business Times,  September 15, 2012, 04:25:44 PM EDT

Financial markets rallied last week as mainly driven by the Fed's announcement of QE3. While commodities had benefited the most among the asset classes in QE1 and QE2, we think the positive impacts this time would reduce due to higher price levels now compared with a few years ago, less supportive macroeconomic outlook and deteriorating impacts that quantitative easing would have on the economy and asset prices. Among the commodities under our coverage, we believe precious metals would get the most advantage from QE3. Talks of fiat currency debasement and concerns over inflation would drive demand for safe-haven and inflation hedge and precious metals, especially gold, offer such protection. Meanwhile, with interest rates staying at exceptionally low levels for a longer period of time, the cost of investing in gold is negligible.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Commodities

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